Posts Tagged ‘Forestry’

Covering some 8 million hectares, forested areas in Estonia, Latvia and Lithuania make up about half of the three countries’ land area in total. That is comparatively less than in Sweden, where its 28 million hectares account for more than two thirds of its land. Nevertheless, the Swedish forestry industry imports up to 40% of its timber from the Baltics.

Part of Swedish firms’ interest in Baltic forests stems from their productivity and their makeup. Latvia, for example, stands out for its high proportion of deciduous trees, such as birch, particularly compared with Sweden, where pine dominates. Baltic forests have something else going for them, too: they are expanding; in the past century, their area has increased by more than half.

In spite of that, the price of Baltic forestland has gone up. In 2000, a hectare of went for €500. Today, it gets €3,700. Much of the increase has been fuelled by Swedish forest companies buying up land. But, should their interest weaken (in January, Södra Skogsägarna, a Swedish firm that is the largest forest owner in the three Baltic countries, announced plans to divest its Baltic holdings), it need not result in a fall in prices.

Danske Bank, a Danish financial institution whose Swedish subsidiary follows the forestry industry, reckons that, unlike in Sweden and Finland, the price of Baltic forestland does not yet take into account factors like its potential for carbon sequestration, its suitability for solar arrays or wind turbines, or its recreational value. All of those could support further price increases, it concludes, even if the Swedes stop seeing Baltic forests solely for their trees.